UPDATE on possible first deal - Posted by Johnman


#1

Posted by JOHNMAN on December 21, 1998 at 22:37:52:

Thanks Cesar! Short and sweet!

Johnman


#2

UPDATE on possible first deal - Posted by Johnman

Posted by Johnman on December 21, 1998 at 20:17:33:

Hi everybody,

Before I forget, MERRY CHRISTMAS AND A PROSPEROUS NEW YEAR TO ALL!!!

OK…

Here are the details as I now know them:

The loan is qualifying assumable
The loan balance is $58,000 (just found this out)
The houses sell between $70-$77K
Back payments and ins $3,600
Taxes $1,200 (96,97,98)
Repairs(approx) $2,000
Owed on new A/C $1,100 (just found out)
200 for title search (approx)
total expenses $8,100 (at this time)

If I re-sale this prop, it’s not a good deal! Here’s why I think not:

Assume selling price is at $74,000

$74,000

  • $58,000 (loan balance)
  • $8,100 (expenses from above)
  • $2,960 (4% negotiated realtor fee)
  • $2,000 (closing cost approx)
    PROFIT OF ONLY $2,940

If my math is correct, this isn’t worth it.

But if I hold it as rental, then I could do a lease/option deal. This would be profitable because I would probably received $2,500-$4,000 option money upfront non-refundable. Plus selling the property at $77-78K, plus rent. Plus I wouldn’t have to dish out $2,960 for realtor fee.

If I where back home I would hold this as a rental. I have an acquaintance here that has rental property. I will probably pass this over to him unless you folks out there can show me that I can still make a decent profit on a re-sale.

Comments please!!!

Thanks,
Johnman


#3

Rules #1, #2 and #3… - Posted by J.P. Vaughan

Posted by J.P. Vaughan on December 22, 1998 at 10:05:03:

#1. Make your profit going IN to the deal.

#2. Make your profit going IN to the deal.

#3. Make your profit going IN to the deal.

The first 10% to 20% of all equity is AIR. Where’s the deal?
Even without the “air,” there is no equity here. You
cannot make money in this game by paying Retail prices.

JP Vaughan


#4

Re: UPDATE on possible first deal - Posted by Cesar

Posted by Cesar on December 21, 1998 at 22:29:06:

this is just my thought, but here it goes:

NEXT!

It just doesn’t seem worth the time to do a deal like this for so little money, but that’s just me. I am sure there will be others where you can pay yourself a little better.

Happy Holidays.


#5

Re: Rules #1, #2 and #3… - Posted by Johnman

Posted by Johnman on December 22, 1998 at 15:15:55:

J.P.,

You’re right. I have to make money going IN. I’m not trying to buy at retail prices. This is why after writing down all expenses that I know of at this time I saw there is no money to be made on the flip side.

Thanks,

Johnman